The Metro District Conflict of Interest Bill, HB 11-1124, now seems likely to pass into law after being approved, unamended, by a Senate Committee yesterday. This is good news for Colorado’s Community Association industry because the bill, as originally introduced, could have had negative consequences for the industry. Fortunately, the current bill does not so much change current law as it adopts good conflict of interest policies into law.
The bill was originally intended to prevent a person from serving concurrently on a metro district board and an community association board in the same district. Through amendments the blanket prohibition on concurrent service was removed and, instead, a more flexible law requiring conflict disclosure and good governance policies has been adopted.
As previously reported, in our March 17 and March 1 posts, this bill will require candidates for election to HOA boards to disclose conflicts of interest, for example, if they currently serve on a Metro District the HOA is located in. Also, the bill amends CCIOA section 38-33.3-209.5. Responsible governance policies – due process for imposition of fines.
by requiring all associations subject to CCIOA to include specific information in their conflict of interest policy. Although the bill gives more guidance than current law on what a conflict of interest policy must cover, it still gives associations discretion on what their actual policy says.
Specifically, the bill amends Section 209.5 to require conflict of interest policies to:
- Define when conflict of interests exist
- Adopt procedures to follow when a conflict of interest exists, including disclosure rules and when a conflicted board member must recuse themselves from voting
- Require a periodic review of conflict of interest policies
We will continue to monitor the progress of this bill toward passage.